Does Your Company Use Accounting, or Just Do Accounting?
A new client made me think about this after our first training session. After five years they have a very profitable business. Annual revenue exceeds $1.0 million, they serve 200 customers strictly through referrals. They have purchased $400K in equipment and owe less than $75K. Plenty of cash on hand because customers pay on time.
They only have one significant problem. They do their own accounting but have no idea what it means!
Fortunately, they are thinking ahead and honest with themselves. They are concerned about growing too fast, wondering how much they could make over the next 5-10 years and what their business could be worth when they are ready to exit. They knew the answers were in their numbers. Somewhere.
Their goal is straightforward: Build Their Financial Confidence.
After understanding their situation and asking a few questions, we agreed on a six-session introduction to business financial management. Each week they will invest in 2½ hours of in-person training and homework exploring:
Accounting and Finance 101 – who does what? And what are financial statements?
Financial Statement Deep Dive – what do 4 years of performance look like, and what caused it?
Monthly review – the books are closed. What do we do with them?
Know what to expect – use data-driven assumptions and a customized template to project profit.
Manage Cash – how to forecast cash for hiring, inventory, and large purchases.
Solve a Problem – Hands-on application using financial information to make a business decision.
By the end of our first session, they realized they need a new CPA! A few questions I asked about their Income Statement confirmed a feeling they had.
Will they be experts in accounting and finance? Realistically, probably not. But they will understand their results, they will be able to spot the questions to ask, and they will know what information to look at. That’s a great start.
What else have they already learned: They are not alone!
I shared my own experience and stories I’ve heard from other bankers, business coaches, and accountants. They decided to do something about it.
Before, they were just doing accounting. Now they will be using it. And building forward-focused financial skills to look ahead.
At Data2Profit, our mission is to provide leaders the expertise to turn more of their into productivity, sales, and profit. This is one way we do it. To learn more, click on the link below or give us a call at 920-948-3355. And let me know if you have a CPA you know, like, and trust!
Magically yours,
Lynn
